Vacation Sales Tax when renting

[tschwa2]

For those who dabble in renting and it ends up growing a little more than 14 days in a single state, I just wanted to pass along info I learned about Maine and this may well apply to other states so you may want to find out.

In Maine (and I confirmed that this applies to timeshares as well as vacation property) if you rent out accommodations more than 14 nights per year be it 1 night in 15 units or 15 nights to one person or multiple short or long stays that equal more than 14 nights you have to apply to collect sales tax on the rentals and then remit 8% of the total rental rate (not your profit and not what ends up in your wallet) so whatever the person renting pays even if it includes booking fees or paypal fees or cleaning fees, etc. You has nothing to do with rental income tax that you declare on your tax.

What should I know about vacation rental sales tax?
Start by contacting your city, county and state governments about requirements specific to your location. Ask about registering your property. Which governmental entities require registration for your area? Ask how much sales tax you should collect and how often these payments are due to the authorities. Generally, these taxes range from 5% to 15% tax on the total rent charges.

So for anyone who rents out more than 2 weeks worth, you should probably contact all the local government offices and see if you are required to comply (make sure timeshares aren't excluded) and what you need to do.

I know that there are several folks here that specialize in particular areas. Good news for those who only rent out 1 or 2 weeks, you might get a 5-15% competitive advantage over the mega renters.

Right now I have 2 annual and 1 biennial SC week I rent out. If I find out I have to collect extra taxes thus making my overall price higher, I might need to ditch that biennial or make sure I use one personally.

 

[tschwa2]

It looks like in Florida, they don't have any minimum thresh hold so if you rent out accommodations in any of these:

Hotel or motel.
 Apartment house or any other multiple unit structure (for example: duplex, triplex,
quadraplex, or condominium).
 Roominghouse.
 Tourist or mobile home court (for example: trailer court, motor court, recreational vehicle
camp, or fish camp).
 Single-family dwelling.
 Garage apartment.
 Beach house or cottage.
 Cooperatively owned apartment.
 Condominium parcel.
 Timeshare resort.
 Mobile home.
 Vehicle or other structure, place, or location held out to the public to be a place where
living quarters or sleeping or housekeeping accommodations are provided to transient
guests in exchange for payment.
 Boats with a permanent fixed location at a dock and not operated on the water away from
the dock by the tenant.

even if it is for a single night you are required to register and pay a 6% state tax plus any local taxes which in Orange County(near Orlando) it would be another 6% plus another place to register.

For every rental night that you don't pay the penalty is $50 plus interest on the tax in addition to the actual tax itself. If someone else is renting out for you, they are the one who needs to be registered and has to collect and submit the tax.

 

[flybefree]

Is this based on where the timeshare is or where you live? I'm assuming the former but want to be sure. I own in SC and am currently planning to rent mine out (just 7 days) next year. I'll have to check on that! Thanks for the heads-up.

 

[theo]

Is this based on where the timeshare is or where you live? I'm assuming the former but want to be sure. I own in SC and am currently planning to rent mine out (just 7 days) next year. I'll have to check on that! Thanks for the heads-up.

Location of the rented property is the sole determining factor for any and all applicable local occupancy or sales taxes. Owner residency location matters not at all.

 

[theo]

Ayuh!

For those who dabble in renting and it ends up growing a little more than 14 days in a single state, I just wanted to pass along info I learned about Maine and this may well apply to other states so you may want to find out.

In Maine (and I confirmed that this applies to timeshares as well as vacation property) if you rent out accommodations more than 14 nights per year...<snip>... have to apply to collect sales tax on the rentals and then remit 8% of the total rental rate (not your profit and not what ends up in your wallet) so whatever the person renting pays even if it includes booking fees or paypal fees or cleaning fees, etc.......has nothing to do with rental income tax that you declare on your tax.

So for anyone who rents out more than 2 weeks worth, you should probably contact all the local government offices and see if you are required to comply (make sure timeshares aren't excluded) and what you need to do.

You are absolutely correct --- and Maine is actually quite aggressive and very successful in collecting that 8% tax from property owners who openly advertise and rent out property for more than two weeks per year. Owners who advertise and rent out summer cottages but fail to collect the tax from their "tenants", just for an example, often discover later to their chagrin that the state will still attempt to collect that tax from said owner anyhow if / when the rentals are retroactively discovered and documented (...exactly how they manage to do that I dunno, but they do --- and no, I've not learned this fact from any first hand, tax-dodging personal experience).

In Maine you'll see most house / cottage rental ads (...but not private timeshare rental ads) state up front that 8% tax will be added to the advertised rental figure.
Record keeping (and later owner retrieval of all pertinent documentation and precise figures for tax purposes) is facilitated by adopting this "tax separation" method.
How many Maine timeshare owners actually both own and rent out more than two Maine timeshare weeks per year? I certainly have no idea.